Chapter 1
INTRODUCTION
As the human race continues to grow and develop, society has to shift to meet its needs. The world of business is no exception to this. Consumer demands change, forcing business to evolve to meet these needs. In contrast, to Edward Bernays who said “we are governed, our minds are molded, our tastes formed, and our ideas suggested.”(1928 cited in Gunderman 2015) This dissertation will explore the idea in today’s social media-run era, this is no longer the case. The public no longer accepts what they are given and are demanding more from businesses and their leaders. Can businesses still get away with just meeting the bottom line?
Phrases like “who cares wins” (Jones, 2012) and “values create value” (Benioff, 2019) summarise the type of businesses this dissertation will be talking about when referring to this new age of business; or more formally, corporate social responsibility (CSR). A term that is increasingly becoming part of businesses’ strategies. It refers to the responsibility a business has to society. Previously businesses were just expected to meet their bottom line, however more recently as we’ve seen the increased power some multinational corporations have gained, we expect them to give back to society. Companies do this in different ways. Some have schemes whereby they save a percentage of profit for philanthropic donations, others will give time and others will help their community through employment schemes. This dissertation will be discussing whether actively engaging in CSR affects the perception the public have of the company or more importantly, the brand.
A company or business, is “an organization that sells goods or services in order to make money.” (Cambridge Dictionary, 2020) However, a brand is more than a functioning organization. A brand is something that gives the organization a personality, it is how the public sees that organization and what makes it unique in the race against its competitors. When introduced to its market a brand gains a certain, non-monetary value. This is something that cannot be measured, yet is a value we hold in our everyday purchasing decisions. A number of factors come into play when standing in a supermarket deciding which type of toilet roll to choose, however more often than not, we already have a bias towards a certain brand. This bias could have influenced over a long period of time by many factors, however, ultimately it increases the likelihood of us buying a certain brand.
This dissertation will be focusing on CSR as one of these factors affecting our decision making, exploring the evidence that it increases the likelihood of us supporting a brand. The first chapter will explain the evolution of these two ideas. From brands forming in the industrial revolution, to how social media is affecting CSR schemes in companies today. The second chapter will focus on the recognition of CSR in business today and making a link between CSR and brand equity. It will focus on five sections: social media, big businesses, employee-based brand equity, company culture and authenticity. It will discuss how these have changed in recent times and how they are relevant in the way a company implements CSR. Furthermore, how they influence the effectiveness of CSR and why some of them have increased CSR in business today.
In 2015 92% of the 250 largest companies produced a CSR report, compared with 64% in 2005. (Meier and Cassar, 2018) Does this prove CSR can no longer be ignored by brands or, as Wally Olins said “is it just a shibboleth or even just a passing fad?” (2014)
Brand Equity
The Beginning of Brands
In the 21st century, we are surrounded by brands trying to sell their products or services to us, but why did this become such a crowded, competitive playing field.
Naomi Klein originates the invention of the type of brands this dissertation will be talking about, alongside the invention of the factory. (2000) Branding products and services that we consume originated in the 19th century around the time of the industrial revolution. This was a time when many people moved from rural areas and farming jobs to built up urban areas with factory jobs, working for large industries. Local butchers, greengrocers and tailors began to be replaced by large chains, changing the way consumers interacted with the products and services they were buying. Production lines lengthened and the goods people were buying were being made further and further afield. This caused a break-down of trust between the producer and consumer that can be called “the provenance cost”: a negative cost that especially affects multinational corporations. (Champniss and Rodes Vila, 2011) Champniss and Rodes Vila suggest that this caused the introduction of brands. Suggesting the idea that brands were introduced as a substitute for the personal trust that the consumer previously had with their local supplier to make the brands feel "closer" and mimic their relationship. (2011) “An interface between consumer and product.” (Klein 2000) Champniss and Rodes Vila define trust as what “underpins whether you accept the inherent risks of entering into a new relationship.” The relationship being that of the consumer and producer. A consumer will only buy into a brand, whether that be a product or service, if they trust the brand. (2011) “Logos were tailored to evoke familiarity and folksiness”, “an effort to counteract the new and unsettling anonymity of packaged goods”. (Klein 2000) However, Klein theorises that brands originated in advertising before shifting into its own idea. Ads told people that products such as the radio, phonograph and car would improve their lives; however branding helped “bestow proper names on generic goods” whilst becoming “the corporate personality”. (2000)
“Brands represent a win-win for producers and consumers: they guarantee quality, consistency and accuracy. They presented consumers with a short-cut to making the right choice along with a level of protection.” (Champniss and Rodes Vila 2011)
Defining Brand Equity
This leads onto the idea of brand equity. That in simple terms can be defined as the “public’s valuation of a brand”. The idea of brand equity was introduced in the 1980s, with two main theorists: David Aaker and Kevin Lane Keller, defining how brand equity becomes a part of the brand assets. There are a number of different components that give a product or service good or bad brand equity. In Aaker D’s model he focuses on loyalty, awareness, perceived quality, associations and proprietary assets. These are a “set of brand assets and liabilities linked to the brand” “that add value or subtract from a product or service.” (Aaker D 1991) Brand equity is all about the consumer’s perception of the brand, how they think and feel about the product or service and how that affects the value of the product or service. (Lane Keller 1993) There are a number of things that may give a product or service good brand equity, for example: being memorable, recognisable, reliable, superior in quality or having a good personality. These could be split into two sections: “performance and imagery.” (Kevin Lane Keller 1993) With performance focusing on the customers experiences of the products and imagery focusing on the customer’s perception of the visual identity of the brand.
According to Aaker’s model, good brand equity adds value to the customer and the firm. The customer benefits from having “confidence in their purchasing decision and user satisfaction.”(1991) Whereas the firm benefits on more of a financial level with “efficiency and effectiveness of marketing programs, brand loyalty, prices/ margins, brand extensions, trade leverage and competitive advantage.”(Aaker 1991) Kranz also has a model that calls the firm side the “financial approach” and the customer side the “behavioural approach”. The idea is that if a company has good brand equity its customers are loyal and will recognise its products or services, allowing them to increase their range of products or services as they would be more likely to be successful under the same name. Positive customer perception means positive effect (loyalty and more sales) which leads to positive resulting value (increase revenue for the company). If the customer's perception is negative the opposite is true. (Kevin Lane Keller) For example, it is easier for Coca-Cola to release their new energy drink under their name "Coca-Cola" instead of a new brand name that would have to gain the public's trust and take time to fully establish itself. Therefore showing it has good brand equity.
Social Capital and how it has changed over time
There isn’t a set formula that gives a brand good or strong brand equity. It is something that is built over time; when a producer creates an image that a consumer wants to be associated with. (Tavassoli, Sorescu and Chandy, 2014) Over time, different trends may determine the deciding factors of what contributes to good and bad brand equity. For example, a strong brand like BMW, who are known for their engineering and performance have had to respond to trends to maintain their brand equity. Their production of diesel cars would have strengthened their performance brand equity in the early 2000s when the UK government changed the road tax laws to favour diesel cars over petrol, as they produced less CO2. The products matched the recommendations of the government, ultimately increasing consumers' trust in the brand. However, with more recent research exposing the harm diesel vehicles can cause to the environment and the UK government’s u-turn in now trying to fade out diesels vehicles, BMW have shifted their products to match new technologies and trends. Consequently releasing the i3 in 2011 as a more eco-friendly option. Although this is an example of a brand shifting to meet the market demand, this is closely related to the brand trying to maintain its brand equity.
When advertising first emerged, companies sold their products with the aim to meet the practical needs of their consumers. For example, in 1881 Proctor and Gamble(P&G) famously first advertised their ivory soap as the soap that “floated” and was “99.44/100% pure.” (Aaker, 1991)(fig10) However, it didn’t take long for advertisers to realise that once utilitarian needs are met consumers will try to meet their hedonic wants. (Champniss and Rodes Vila, 2011) This was later theorised in Maslow’s hierarchy of needs shown in figure1 that, at the time showed the stages of human motivation. (1943) Although these stages have since been questioned as, for example, anxiety is a widespread issue, the hierarchy helps to explain the change in advertising techniques. (Grant 1991) As little as 14 years later in 1896, P&G released a new advert featuring a “beautiful, calm and elegant woman”. (Champniss and Rodes Vila, 2011)(fig11) P&G’s aim was to no longer meet the practical needs of consumers, but to connect to them on an emotional level. According to Bernays, these brands can “mould our minds”(1928 cited through Gundermand, 2015) to sell us what they want. Champniss and Rodes Vila base the change in trends on the idea of “social capital- the health of society measured in relationships and their strengths.” They say that the shift to targeting the emotions of consumers was a “brand image era”, a time when brands were linking ideas and beliefs and taking advantage of the lack of trust in society at the time. An era they call “social capital waning”. (2011) During this time, with an expanding middle class and research that shows more than 60% of nation GDP in Western markets is driven by consumer spending, brands encouraged and were encouraged by consumers into unsustainable practices.
However, in more recent times, Champniss and Rodes Vila speak of a trend they call “social capital rising” or “wakefulness”. (2011) They propose that there is an increased “togetherness” as “society seem to want to reconnect, engage and operate in a more balanced way.” This is a trend that they attribute to the invention of social media and its increased popularity since early 2000. In contrast to the distance that was caused from the industrial revolution and globalisation, social media has since decreased this “provenance cost” connecting the world once again. This era leads to a trend of increased “governance” and a renewed focus for what’s best for most of us, rather than few of us.” (Champniss and Rodes Vila, 2011) It is through this idea that this dissertation will focus on the change in business patterns and if this period of “wakefulness” is relevant to the way brands are altering their approach today.
Fig 1,
Corporate Social Responsibility
Corporate social responsibility (CSR) is an idea that in recent years has gained great momentum. Although the world, as a trend may be in a period of “wakefulness” this doesn’t stop the increased need for trust in brands; it increases it. Large scale manufacturing and with the added invention of the internet, it has become difficult to track where, what we are buying really comes from. Trust is more important than ever and the public are demanding companies are more transparent, with 67% of business leaders saying that they believe success is based on corporate transparency and 7 in 10 prosumers saying transparency/ social media is making the world a better place. (Jones, 2012)
The definition of CSR has been constantly renegotiated as expectations of businesses grow. The European Commission define CSR as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with their stakeholders on a voluntary basis.” Whereas, PricewaterhouseCoopers define CSR as “the proposition that companies are responsible not only for maximising their profits, but also for recognising the needs of such stakeholders as the employees and customers they serve.” (2004) There is an on-going debate on the voluntary nature of CSR. Does mandatory responsibility still fall under the CSR bracket? Carroll’s typology(1979 cited in Blowfield&Murray, 2011) splits CSR into four types of responsibility: economic, legal, ethical and discretionary. Starting with the fundamental economic responsibility of a business “to produce goods/services that society wants at a profit”, the typology fulfils all necessities of a business. The next tier of responsibility is often taken for granted in a business especially in the developed world: legal responsibility the "obligation to fulfil economic mission within the confinements of the law." Following on, ethical responsibilities cover the "ethical expectations of a company", these are acts that are necessary to maintain a licence. Often acts such as animal testing or low working conditions that more frequently are being addressed by the public. For example in the 1980s, The Body Shop helped campaigners against the testing of cosmetics on animals after the release of “Harrison’s Animal Machines” in 1964. In more recent times, campaigners with the help of groups such as PETA are successfully targeting larger corporations like Macdonald’s on improving animal welfare. (Blowfield&Murray, 2011) Finally, the level of CSR that will be spoken about in this dissertation is labelled “discretionary” under Carroll’s framework. This is the type of CSR that is voluntary; “desirable but discretionary acts that contribute to societal good.” These are acts such as philanthropy that go above and beyond societal expectations. This is often the definition of CSR that we talk about today, the type that “begins where the law ends.” (Davis, 1973: cited in Blowfield&Murray, 2011)
Defining CSR
Although there is evidence of responsibility in business tracing back as far as Roman times, the more recent emergence of CSR can be traced back as far as the 1950s. During this time it can be said that CSR shifted from individuals doing good to the behaviour of companies and how they positively contribute to society. In the 1980s this became less philosophical and more about the acts of responsibility that a company took on. Onto the 1990s, environmental responsibility came into the foreplay and terms like "corporate responsibility" were introduced. (Blowfield&Murray, 2011) From here we can look more closely at recent times. David Jones splits these into "the three ages"; three decades that span from 1990s till now. The first decade, 1990-2000, he calls "the age of image". This was a time when as a trend, companies’ key concern was their image rather than reality. The majority would alter their image without changing their actions, misleading the public. This was named "greenwashing" or "nicewashing". In "the Greenpeace book of greenwash" they point fun at , Shell, quoting “We didn’t do it to help the planet. We did it to look like the sort of company that cares about that sort of thing.” (cited Jones, 2012)
As social media became more popular and came into the forefront of everyday life; "the age of advantage" took over. From 2000-2010 as a whole, consumers grew "more vocal" and "digitally empowered" meaning companies gained a competitive advantage from delivering honest CSR. (Jones, 2012) During this time companies like Walmart, Toyota and M&S built a CSR budget and goals into their business plans. M&S created a plan A in 2007 whereby they invested £200 million towards making 100 commitments to tackle climate change over the next five years. With Stuart Rose saying M&S were committed to becoming the “the greenest- genuinely greenest- retailer in the UK by 2012.”(2007 cited through Blowfield&Murray, 2011) This plan was so successful that they broke even by 2010, adding £50 million in profit and a further £70 million in profit in 2011. (Jones, 2012)
With social media helping to create movements of support or bringing down businesses, leaders and governments, "the age of damage" started in 2010 until the present day. Now, according to David Jones, businesses that do not actively engage in CSR will "suffer damage". Consumers seem to now know more, expect more and many will act against a company that is not doing good. (Jones, 2012) For example, even though BP adopted the slogan "beyond petroleum" it was obvious this wasn’t the reality after the 2010 Gulf of Mexico oil spill. The public reacted to this as shares went from "$60 to under $30 in under 2 weeks".(Jones, 2012) We then saw the power of the public and social media as a spoof twitter account "@BPGlobalPR" starting tweeting sardonic tweets such as “Safety is our primary concern. Well, profits, then safety. Oh, no - profits, image, then safety.” This Twitter account had a higher online presence than BP itself with 190,000 followers to BP’s 18,000. Showing just how quickly "misbehaving companies" can be punished by social media.(Jones, 2012)
CSR through the Ages
There are a number of different reasons for a company to adopt CSR that range from: improving relationships with stakeholders, improving operational efficiency, the market potential of a CRS image and personal beliefs and views. In one example these motives can be split into three groups: institutional, instrumental and emotional. Institutional motives are based on the fact that CSR is expected; there is pressure from the public to "do good", competitors are adopting CSR and it is becoming normal business practice. Instrumental motives are business related. Companies that adopt CSR because of instrumental motives have decided "it will pay off." It will help reduce risk and increase cost-saving in the company. Finally, emotional motives are when a company views joining CSR activities as the morally right thing to do. (Neergaard, 2006 cited through Pedersen, 2015)
These theories assume CSR with the purpose of competitive advantage. (Porter&Kramer, 2006 cited in Gatti, 2008)
Drivers of CSR
Chapter 2
Is CSR Recognised?
There isn’t a universally recognised way of measuring brand equity. There is no quantitative rating we can give a brand that sums up how it is recognised in the public eye and what advantage this gives the brand. In the same way there is no formal way of measuring the good, one company is doing to society. On one hand it is possible to measure the amount they have donated in relation to their profit, however this is only a small part of CSR. Although there is academic research on CSR and the competitive advantage it may give, this is yet to be put into a quantitative scale. This chapter will cover some ways in which CSR is recognised in business and therefore how it may affect brand equity, and why this recognition may have come about.
In spite of not being able to compare individual companies on a scale, there is evidence to suggest an increase in the recognition of CSR in companies. Not only is it coming into the forefront of companies’ business strategies, CSR also appears on the front page of Unilever, Tata, BHP Billiton and Samsung websites. (Blowfield&Murray, 2011) This would suggest that these brands want CSR to be one of the first things a potential customer sees when looking at the brand, meaning they value CSR at the forefront of their business strategy. This is emphasised by the change in figures over a five year period. In 2005, 35% of managers said CSR was a priority, this increased to 56% in 2008.(Blowfield&Murray, 2011) In 2010, 79% of business leaders accepted CSR as a business cost. (Jones, 2012) The CSR dialogue is not restricted to academic research, but would convey the impression of becoming part of every day business talk. For example, Bart Becht the former CEO of Reckitt Benckiser said “It is important that we understand that saving money and saving the environment need not to be mutually exclusive.” (cited in Jones 2012)
On a larger scale, India has noted the benefits of CSR, so much so the government has decided to make it mandatory.Although it was previously discussed that this dissertation was referring to voluntary CSR only, the CSR in India that is now being made mandatory is about helping other people. It is still with the nature of "doing good" for society rather than "not doing bad". The government has used CSR as a development tool, 16,000 firms fall under the requirements of the mandatory act that obliges them to develop CSR activities. However, although making CSR mandatory should increase awareness and help regulate policies, it may also have some disadvantages. For example, it could reduce creativity in investment, the programmes may be less effective and the CSR resources could be used on personal projects, leading them to become a cover for corruption. (Gatti, 2008)
Although from a different perspective, in 2010, 86% of consumers believed it is important that a company stands for something other than profitability. (Jones, 2012)
Big Businesses- Can they still be Responsible?
The size of a business is always likely to affect their impact on society and therefore their responsibility in society, just as different industries differ on their impacts on society and the environment. There’s two sides of the argument when talking about CSR in big businesses. On one hand, more success can mean more impact, for example Bill Gates can have a bigger impact as he has $40 billion to give away.(Jones, 2012) Just as a company that pledges the 1-1-1 philanthropy model will give more as the company increases in size and revenue. The 1-1-1 model was created by Salesforce.com's CEO, Marc Benioff in 1999. It pledges that 1% of their time, 1% of their equity and 1% of their product goes to benefiting the community around them. Since starting founding the company they have given "4.8 million hours, $310 million in grants and their products are used by 45,000 non-profit and educational institutions today." Having a bigger following may also lead to bigger companies having a larger impact. So, not only have Salesforce had this positive impact themselves, they have also influenced 10,000 other companies from over 100 countries to pledge the 1% movement. (Benioff, 2020)
However, the impact of large companies is not always a positive one. Thomas Quinn refers to these businesses as "monster businesses" and suggests they are too big to be a responsible member of society as they stifle their competition.(cited in Blowfield&Murray, 2011) Using the example of retail, chains have stifled the many independent retailers in high streets across the UK. "In the USA having a chain store in a market makes roughly 50% of the discount stores unprofitable".(Jia, 2008) The European commission says that small and medium sized enterprises "may not use the term CSR, but through close relations with employees and local communities they often have a naturally responsible view to business." (2011) This goes against the more cynical argument that the people of power doing good in this world, only start doing good once they have made a sufficient amount of money for themselves. “Philanthropists only got interested in charity after they got rich in a less than responsible way.” (Cannon, 1994 cited in Pedersen, 2015)
These contrasting arguments suggest that the size of the business doesn’t impact on their ability to do good, as much as we may assume. In some cases business owners will limit the size of their business to stop it becoming damaging. In response to being asked about her company "growing like crazy" Yvon Choninard of Patagonia said “it would destroy everything [she] believes in”. (cited in Jones, 2012) However, once again this contrasts with Benioff’s model, that will do more good the more the company grows. So, maybe it isn’t the size of the business that impacts how much responsibility they take on, but how they run the business and their values.
Employee-based Brand Equity
Having a higher brand equity not only increases a company’s competitive advantage amongst consumers, but also increases their advantage in the competitive world of recruiting the best talent.
Brand equity transfer is the idea that brand equity transfers to any person associated with the brand. Being associated with a brand that is valued highly in society or amongst peers can increase one's own identity both privately (self-esteem) and publically (status). This is true for objects like the iPhone and although they may differ for different demographics they are called “objects of public desire”. (Tavassoli, Sorescu and Chandy, 2014)
The same idea of brand equity transfer is even more relevant in the job market. As a consumer has many “objects of public desire”, so an employee needs to seek a "stamp of approval". Meaning not only has the employee chosen that brand, but the brand has chosen the employee, increasing self-esteem and status. (Tavassoli, Sorescu & Chandy, 2014) So, effectively having higher brand equity will increase the number of people wanting to work for the company, and therefore most likely increase their talent pool. Tavassoli, Sorescu and Chandy also suggest that stronger brand equity allows a company to pay its employees and executives less. Thus, increasing the company’s profits. (2014) “A paycheck may keep a person on the job physically, but it alone will not keep a person on the job emotionally.” (Bhattacharya, Sen&Korschun, 2008)
Bhattacharya, Sen and Korschun use “employee value proposition” in a similar way to brand equity transfer, however this term focuses on why an employee would want to work for a company.
The CEO of Deloitte, Touche Tohmatsu said “The best professionals in the world want to work in organizations in which they can thrive, and they want to work for companies that exhibit good corporate citizenship.” (cited in Bhattacharya, Sen&Korschun, 2008) They focus on meeting an employees needs rather than increasing their status. “CSR also humanizes the company in ways that other facets of the job cannot.” They also differentiate between companies like Cisco Systems, General Electric and IBM who view CSR as “strategic imperative” and suggest that companies should be viewing their employees as “internal customers” (2008) One point they make is that companies need to increase employee proximity to CSR. They show this in figure 2 where they suggest companies need to change the traditional "top-down" approach for a "co-created" one to make the employees feel valued.
It is no coincidence that the top 6 companies on “Fotunes 100 Best Companies to Work For” all implement CSR in their business. From Salesforce with the 1-1-1 approach, to Workday with a four-month paid Career Accelerator Program to attract military veterans and Hilton with their soap recycling project.(2020)
Social Media and Transparency
Social Media has drastically changed the way we communicate and the way brands communicate with us. In the globalised world where we become immune to messages being fired at us from all devices, there seems to be a shift in the way we are tackling this consumerist society. Globalisation happened as technology developed, travel became easier and social media came into play. In the globalisation era interconnectedness increases and time and space are no longer such big constraints. (Pederson, 2015) As of 2016 there were three million businesses actively advertising on Facebook (Facebook for business, 2016) With such a large number of corporations out there, it is difficult to know who to trust. The lengths a brand has to go to, to gain our trust are increasing. As a whole, people are questioning brands more, even when they are making an effort to engage in CSR or be more sustainable. For example, in figures 4 Gap have released a new coat made of 40 recycled bottles, although they have some positive comments, there are also many questioning that the brand isn't environmentally-friendly in other aspects. On the other hand, in figure 5 Finisterre, a company known for their sustainable practices, posted about their new dissolvable plastic packaging, “an industry first”. The comments are flooded with positive comments such as “yet another reason to buy from you”. These examples highlight the ease of communication through social media, what once would have been communicated through a letter or phone call, can now be typed out and read by all a brand’s followers within seconds. This example also highlights the different responses to two products that encourage sustainability. One brand is praised and the other scrutinized suggesting brands can no longer “greenwash” in the way they used to without being questioned that what they are advertising is at the core of the brand. “82% of influential consumers say they know more about products/services they are using”, “41% of consumers have actively looked for more information.” (Jones, 2012) This same idea can be applied to CSR, companies are questioned more on the any engagement they claim to make and stakeholders question if it is in line with the company’s values. “The most successful companies of the future will be those who make sure their internal reality matches their external appearance” (Jones, 2012) In a survey of 40 people aging from 18-65+, 87.5% said they were more likely to buy from a brand that was transparent about what they do. (fig6) Thus, showing how social media has changed the way brands interact with their customers. Figure7 shows an example of the Australian clothing brand “Mister Zimi” using social media to create a dialogue with their customers.(Fig7) Up until social media, interactions between brand and consumer had mainly been a monologue. A brand would advertise a certain message and consumers would have no opportunity to respond. However, now there’s a chance to create a dialogue with a brand, consumers are able to question their motivations, actions and values. There is no evidence that links this idea directly to the increase in CSR, however it does suggest that brands now have the chance to listen to their customer’s feedback.
Change in Advertising
In addition to the increase in CSR schemes, there has also been a shift in the way many brands advertise themselves. Referring back to the change in advertising in the last 1800s from practical needs to emotional wants, most adverts continue to tap into the hedonic wants of the consumer.(fig10&11) However, a number of adverts in recent years suggest that brands are now aiming to tap into these hedonic wants through CSR related topics. Aforementioned, the P&G adverts of the late 1800s moved from drawing customers in with practicalities to beliefs and ideas. Comparing these to the P&G adverts of today, there is a visible change in the way they captivate their audiences. The 2019 adverts, “the talk” and “the look”, focus on the topic of racism and its regrettable continued relevance. (fig8) They function as a campaign against racism almost as much as they do as an advert for P&G. The brand have chosen a topic that isn’t directly related to soap or any of their products to advertise themselves. Thus, suggesting that they believe it will help sell their brand. This is an informative example of the power of brand equity, as the brand feel by showing their support of this topic, consumers will support the brand and therefore their products more. Choosing a topic like racism suggests that brands do benefit from engaging in CSR on a public level. Damon Jones of P&G said “Consumers are actively looking for companies to take a role. When we look at forming genuine and authentic relationships with our consumers, this is what [they] expect.” (cited in Graham, 2019)
Another example of this is the recent Pret A Manger announcement that they will be offering “hot drinks on the house and 50% off everything else” for NHS workers during the Covid-19 pandemic. With the world in crisis, Pret’s post has been shared across Instagram againing them precious coverage. Comments on the post suggest that consumers approve: “This is making me want to support your company”, “what a beautiful gesture”. The user even admits that it could be a “PA stunt”, but says “I’m all in for this kind of self promotion” (fig9)
This new wave of advertising cannot be ignored as a sign of the increase of CSR, however using it in advertisements suggests that its purpose is to promote the brand. Moreover, this suggests that the companies believe CSR has a positive impact on their brand equity.
Company Culture
Although research suggests that having a CSR scheme is beneficial to a business, this does not mean any business can use charitable donations as a guarantee to increase their profit. More recent research proposes that the company has to be genuine and have the right intentions if they are going to use CSR as a means to attract customers, employees or any stakeholder. This focuses on the idea that CSR is a factor in shaping a person's view on the business and therefore the brand equity. Many of the forerunners of CSR talk about making sure it is at the core of what they do. CSR is increasingly being used as a marketing strategy however research shows that the brand has to believe in what it is doing in order to gain the support of its employees. “While initiatives will benefit society, they will backfire for companies if they’re being used for the wrong reasons” (Meier&Cassar, 2018) A study was carried out to see how CSR motivated employees. They split a group of employees in half, telling one group the firm would make a charitable donation if they completed some extra work and the other half the firm would make a charitable donation if they completed it or not. They found that 49% of workers completed the work when the charitable donation was dependent, compared with 54% who completed it when the donation was independent of their work being completed. This study suggests “that employees care about the intentions behind the company’s CSR activities, not just the positive impacts those activities have on society.” When asked about the rewards conditional on positive outcome, “respondents rated the firm less socially responsible” and they were “less likely to accept a lower wage” than if the company practiced CSR independent of their employee’s work rate. “Managers need to genuinely care about the social impact of their CSR actions, only then will workers award with higher productivity.” (Meier&Cassar, 2018) Stella Maccartney said “sustainability is a way of life- and a focal point for her ever-expanding business”. (Fig12)
In conclusion, this group of evidence suggests there has been a shift in the expectations of brands since the invention of social media. There has also been an increase in the engagement of CSR in business, however it is difficult to see whether these are linked. With 92% of the 250 largest companies producing a CSR report in 2015 and an increase in brands publicly displaying their CSR engagement through adverts, there seems to be a trend in using CSR to gain brand equity. However, Meier and Cassar’s study suggests it’s not as straightforward as this, brands have to “genuinely care about their social impact”. (2018) This is also backed-up with evidence in figures 4,5,7,9, displaying consumers questioning brands on their CSR engagement. Brands that do engage in CSR as their core values seem to benefit from it, and although often questioned more than they may have been before the introduction of social media, brands seem to still benefit to a certain extent from engaging with CSR even if it is not in their core values. As previously mentioned it is not possible to measure brand equity on a scale, however consumer’s positive reactions and research on the competitive advantage to brands engaging in CSR would suggest that it does increase the strength of a brand’s brand equity.
Conclusion